Skip to main content

Market Overview

Mike Khouw's USO Trade

Share:

On CNBC's "Options Action" on Friday, Mike Khouw suggested a strategy for investors with a long position in United States Oil Fund LP (NYSE: USO).

The ETF hasn't recovered as much as crude oil, but it is still indicative of future price movements in crude oil. Khouw is concerned crude oil could pull back after a big move higher, and so he would look to sell covered calls in USO. He wants to sell the March $37 call against the long USO position for a credit of $1.20.

The sale of the call offers a bit of protection in case of a move lower and it also improves the profitability of making a profit. It offers some upside, as the selling price is set at $38.25 or 8.23% higher.

 

 

Related Articles (USO)

View Comments and Join the Discussion!

Posted-In: CNBC Mike Khouw Options ActionOptions Markets Media

Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com